Edited by Léo-Paul Dana, Mary Han, Vanessa Ratten and Isabell M. Welpe
David Smallbone and Xiao Jianzhong Introduction China is the fastest growing economy in the world, reflected in a dramatic increase in GDP per head of about 300 percent over the past 10 years. This has been achieved through China’s success along a number of dimensions, including attracting foreign direct investment, as part of its ‘open door’ policy; restructuring and reforming its stateowned enterprises; building up a selected number of large enterprises to become globally competitive ‘national champions’; investing in science and technology infrastructure; and allowing a private enterprise sector to emerge. It is well documented that small and medium-sized enterprises (SMEs) have been a major driving force in China’s transformation from a relatively closed, stagnating economy to one based on rapid growth and dynamic industrial expansion. At the same time, the nature of the SME sector in China contains some distinctive features, reflecting the relatively short period of transition to date and some specific features of the Chinese context, which have shaped the development path of private sector development in the country. Previous writers have identified a number of phases in the development of China’s SMEs. For example, IFC (2000) identified three phases: 1. Phase 1: 1978–83 The Third Plenum of the Chinese Communist Party’s Eleventh Central Committee is said to mark the beginning of market-oriented reforms in China. Although no specific announcement was made with respect to the development of private business, the Plenum’s emphasis on economic development and individualistic incentives gave an impetus to the development of...
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